Why Bono, Madonna and Brangelina Cannot Save Africa

Traditional proverb: Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime.

In Dead Aid: Why Aid Is Not Working And How There is a Better Way For Africa, former Goldman Sachs and World Bank employee Dr. Dambisa Moyo adeptly posits that no matter how many billions of dollars Western associations and governments funnel into Africa, it will not reduce or solve the problem of poverty in Africa. Economic development in Asia and Latin America has been more successful than anything seen in Africa.

Moyo’s idea is not exactly original. Criticizing Western (read: white) benevolence to Africans has become sport among the black intelligentsia. What the author succeeds at in Dead Aid, however, is uniting these arguments together for the first time in an accessible work. In this age of financial crisis and the wake of the G-20 summit, Dead Aid is a worthwhile contribution to the debate on economic relief. The book also provides valuable information about the status of existing aid programs.

Moyo’s timely criticism centers on direct government to government aid or that which is distributed by institutions such as the World Bank. In a manner that inspires us to rethink our notions about charity, she argues that the system has done nothing to boost African economies. The failure, in Moyo’s analysis, has little to do with the more typical criticism that aid has been ineffective in combating persistent problems such as lack of infrastructure, authoritarian rule, local corruption, oversized bureaucracies and burdensome debt.

Bono, who has advised President George W. Bush on Africa, and Bob Geldof, who was invited to the G8 Summit in Scotland in 2005, she goes on to argue, drown out more reasoned and more African voices on these matters. One critic of the aid existing model observed in the book, “…my voice cannot compete with an electric guitar…” While Moyo understands that celebrities may trigger public emotion, she makes a compelling case that the millions they raise actually work against long-term prosperity.

Statistics show that large-scale aid, whether from banking institutions, national governments or funds raised by rock stars, has had no positive impact on the gross domestic product or living conditions of sub-Saharan countries. More Africans live in poverty now than 35 years ago. The U.S. has donated $300 billion to Africa since 1970. From 1970 to 1998, when aid flows peaked, Africa’s poverty rate increased from 11 percent to 66 percent.

The book traces the history of foreign aid. In 1944, the Bretton Woods Meeting was convened to restructure international finance, establish a multilateral trading system and build a framework for economic cooperation to avoid a repeat of the Great Depression.

The author dismisses the Marshall Plan as an inappropriate model, as it constituted only 2.5 percent of the European recipients’ GDP, whereas Africa receives 15 percent of its GDP from foreign aid. Marshall was also finite in duration (1947-52), as opposed to permanent flows which stifle the incentive toward investment or entrepreneurship.

Moyo addresses the unspoken notion that some benefactors, consciously or not, view Africans as “children,” incapable of achieving economic growth without foreign aid. And she dissects the Western predilection to view African challenges differently than those facing Asia or Latin America.Such paternalism has hurt the continent.

Dead Aid’s thoughtful solutions point to emerging growth nations such as Brazil, Colombia and China, where increased investment and savings have spurred development. As an African model, Moyo cites Botswana, whose 6.8 percent rate of economic growth between 1968 and 2001 was among the highest in the world. By 2000, aid only made up 1.6 percent of the country’s national income; market economy options, open trade policy, and fiscal discipline led the surge. Dead Aid makes the case that African governments should access the bond markets, where investors are always seeking emerging opportunities. Chinese investment in countries such as Ethiopia, Ivory Coast and Ghana, for example, has jump-started their respective economies.

Moyo is not crass in her criticism. She acknowledges donors’ good intentions, but thoughtfully points out the vicious cycle they set in play. While Madonna’s adoption attempt and Bono’s buy Red campaign may garner headlines and win hearts, we can only hope that Dead Aid will change behavior.